The Openpay Group Ltd (ASX: OPY) share price is under pressure on Monday despite the release of a positive announcement.
In morning trade the buy now pay later (BNPL) provider's shares are down 3% to $2.56. This follows further weakness in the tech sector.
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What did Openpay announce?
This morning Openpay announced that it has entered into the Australian hospital segment via a partnership with St John of God Health Care. It is one of Australia's largest Catholic providers of healthcare services, with hospitals in Victoria, New South Wales and Western Australia.
The company notes that this makes Openpay the first BNPL provider to enter the hospital segment.
According to the release, a six-month initial launch has now commenced at three St John of God Health Care hospitals. This allows patients to spread their hospital costs for elective surgery procedures across plans ranging from two to 12 months.
The hospitals taking part in the initial launch are St John of God Murdoch and Mt Lawley Hospitals in Perth and St John of God Berwick Hospital in south-east Melbourne.
At the end of the trial period, both parties will decide if a full rollout should then go ahead.
An alternative to health insurance
The Chief Operating Officer of St John of God Health Care's Hospitals, Bryan Pyne, believes people should use private health insurance, but recognises that some individuals choose not to have coverage. He feels this service represents an alternative for these consumers.
He said: "There has always been a portion of patients who choose to self-fund their health care costs. Research conducted with these patients indicated an appetite for greater flexibility and availability of payment options, including the ability to smooth costs."
"This partnership expands choice for these individuals and will provide a flexible alternative to self-funding procedures while minimising the burden of a lump sum payment for the cohort of patients that elect not to take out private health insurance. It provides these patients with more options to access private health care when they want it, allows them to choose their doctor and hospital, and to avoid long delays in accessing specialist care", he concluded.
Openpay's CEO, Michael Eidel, is also positive on the agreement.
He commented: "This agreement with St John of God Health Care positions Openpay as the first Australian BNPL provider to partner with a major private hospital group – it is a proud moment for us. We have seen in other areas of healthcare how important it is to provide a flexible budgeting tool to enable patients to access the care they need at the time they need it."
"This partnership also provides patients the option to pay for elective surgery with the support of Openpay's flexible plans. It is a natural extension of our work in areas such as optometry, dentistry and audiology, and it demonstrates our growing prominence in the healthcare vertical," he added.
